Tuesday, July 22, 2008

U.S. COURT OF APPEALS FOR THIRD CIRCUIT RULES CBS IS NOT LIABLE FOR JANET JACKSON SUPER BOWL 2004 WARDROBE MISHAP

As Super Bowl viewers may remember, Janet Jackson lost part of her wardrobe while performing with Justin Timberlake during the 2004 centerpiece half-time show, revealing - for less than a second - Jackson's bare chest.

An estimated 90 million viewers world-wide watched when Jackson's top fell as Timberlake danced closely behind Jackson while singing, "Gonna have you naked by the end of this song."

The FCC deemed the mishap inappropriate and, possibly, willful. In response, the FCC fined CBS, the network host of the 2004 Super Bowl, $550,000 for Jackson's wardrobe failure. The FCC was not alone in questioning whether the Jackson wardrobe mishap was truly accidental.

Regardless, on Monday July 21, the U.S. Court of Appeals for the Third Circuit threw out the FCC fine against CBS. In overturning the CBS fine, the Court of Appeals found that the FCC deviated from its thirty-year practice of fining indecent broadcast programming only when it is so "pervasive as to amount to 'shock treatment' for the audience."

The federal appellate court, while not deciding whether the incident was willful or inadvertent, found that the fleeting nature of the event, and the FCC's deviate approach in dealing with the issue, as opposed to its previous responses to network broadcasting indecencies, did not warrant the fine imposed on CBS.

In its finding, the court emphasized that, while the FCC has discretion in its enforcement powers, "...it cannot change a well-established course of action without supplying notice of and a reasoned explanation for its policy departure."

FCC Chairman Kevin Martin expressed his frustration with the decision, "I continue to believe that this incident was inappropriate, and this only highlights the importance of the Supreme Court's consideration of our indecency rules this fall."

It is unlikely that the FCC will appeal this court's ruling. Instead, it will push to re-establish its enforcements powers for indecent broadcasts, based on an important Supreme Court ruling that is expected later this year.

A similar decision by the Second Circuit Court of Appeals last June is of note. There, the federal appellate court, in reviewing Bono's use of the f-word at the 2003 Golden Globe Awards, concluded that the FCC's 2004 declaration that "fleeting expletives" should be subject to a hefty fine was "arbitrary and capricious."

In short, the federal courts have not accepted the FCC's aggressive enforcement policies of recent years. The US Supreme Court will weigh in next.

Saturday, July 19, 2008

REGGAE ON THE RIVER SETTLEMENT DETAILS ANNOUNCED, THE TERMS OF WHICH MAY LEAVE MANY HUMBOLDT COUNTY OBSERVERS FRUSTRATED

The Mateel Community Center and People Productions/Dimmick Ranch have agreed to final settlement of their dispute over the 23-year running REGGAE ON THE RIVER music festival in Humboldt County, California.

In short, People Productions/Dimmick Ranch will pay the MCC $500,000, all lawsuits will be dropped, and the MCC will have no rights to produce REGGAE ON THE RIVER on the Dimmick Ranch property, and an adjoining parcel, where the world-famous festival had been produced for 23 consecutive years before the dispute arose.

This leaves People Productions/Dimmick Ranch in full control of events produced on Dimmick Ranch. This will be the second year that the replacement event, REGGAE RISING, will be produced on the Dimmick Ranch property. And, as has been the case for many years, the event is expected to sellout all 12,500 to 14,000 admission, parking, and camping passes released for the three-day event.

The new PP/Dimmick Ranch partnership will also produce a Willie Nelson show in late August on the same property, which is expected to draw at least five-thousand people, as the first non-reggae event produced at the Dimmick Ranch.

These two August 2008 events alone will, likely, net enough income to pay off the entire $500,000 MCC settlement, just months after a settlement was finally reached.

This, effectively, concludes the much-criticized but successful takeover of the event by PP/Dimmick Ranch, and leaves the MCC well-short of income and expectations that the MCC held under the earlier long-term relationship. The MCC does, however, retain its rights in the REGGAE ON THE RIVER trademark, which is now, arguably, substantially devalued.

On the other hand, for People Productions and Dimmick Ranch, the sky is the limit. The two new partners must be feeling pretty good, because this is a major coup. To give perspective, the annual three-day reggae and international music festival has consistently grossed in excess of $3.5 million per year, and is considered by most to be the premier reggae music festival in the world.

Perhaps the linchpin to the takeover of the event by PP and Dimmick Ranch, occurred last winter, when a Humboldt County court denied the MCC injunctive relief in the early stages of litigation, allowing People Productions to bowl-over the ROTR event with its own identical event, on the same property, on the same dates, using the same established relationships, resources, and infrastructure.

Another important problem for the MCC in maintaining its position and interests, was the Humboldt County permit department's decision to allow all permits to produce the event to become under the control of PP/Dimmick Ranch, despite the fact that the permits had originally been granted to the MCC.

However, neither of these two important rulings were challenged by the MCC, perhaps because the MCC's financial resources were now limited due to the ongoing dispute.

In fact, it became apparent to many observers close to the ongoing controversy that the MCC had become particularly disadvantaged in the legal proceedings because of its financial position.

The result is that the MCC, in an understandable but perhaps compromised decision, accepted a pay-out settlement, and the arbitration judge's "arm-twisting" and warning that "no one will win this litigation."

It seems evident, however, that someone did win this litigation, and it is not the MCC.

Here is the first MCC press release on the settlement:
Mateel Signs Peace Accord with Dimmick, People Productions

The Mateel Community Center Board of Directors has agreed to drop its claims against Tom Dimmick and Carol Bruno’s People Productions rather than to continue to battle in the courtroom. In return, Dimmick and Bruno will pay Mateel a half million dollars. They will also dismiss all of their lawsuits against the Mateel, its staff and Board of Directors. The Mateel will retain ownership of its trademark, Reggae on the River, kicking off a new era of Reggae this coming Saturday at Benbow Lake State Park.

We feel the need to get on with our lives is important to many people in the community, and that the courtroom drama only continued to hold us all hostage to a future of fighting over a very uncertain outcome. The months of legal battling, the cost of the lawsuit to Mateel donors, and a desire to get on with our real job-running the Community Center, has led us to this difficult decision. Both sides were also motivated strongly by Judge Warren, who twisted everyone’s arms to get us to settle the case. At this point, we feel the settlement path best fulfills our fiduciary duty as the Board of Directors of the Mateel.

We are ever so grateful to the hundreds of community members who’ve supported us through this difficult struggle. It’s been amazing to watch the outpouring of people’s energy to help at the Mateel—something which will need to continue for the Mateel to thrive as a local Community Center. While we believe that the $500,000 isn’t nearly enough, it will help to re-establish a modest reserve for the Mateel, as well as help pay for long-deferred maintenance of the building. But the future of the Mateel no longer lies at the feet of a monster Reggae show—in fact, it remains in the capable hands of the people of Southern Humboldt, and the Mateel will remain strong with ongoing community support.

WHEN IT COMES TO TOURS FOR RAP AND HIP-HOP MUSIC ARTISTS, THE BUCK STOPS WITH CARA LEWIS, THE NO-NONSENSE WILLIAM MORRIS AGENT IN NEW YORK

For nearly three decades, RAP music, and its less obtrusive Hip-Hop music counterpart, has been developed by aggressive and impressive record producers, record labels, and urban music industry entrepreneurs. In fact, many of these personalities are the bread and butter of the pop music industry today.

However, when it comes to touring these artists, and placing them in productive and reliable live performance situations, it has not been an easy road. This was particularly true in the early years of gaining acceptance for the genre. At the time, there were many skeptics. Today the skeptics have been quieted, as RAP and Hip-Hop touring has become one of the most viable commodities of the touring industry.

One agent, Cara Lewis, Senior VP of Talent at William Morris New York, is almost single-handedly responsible for this result.

Cara Lewis joined William Morris as an agent in 1989, and she has led the way in Hip-Hop touring ever since. Her aggressive, no-nonsense approach has set the standard for the development of RAP and Hip-Hop music as a viable live performance commodity, ever sense.

No other agent has close to the influence that Lewis has in RAP and Hip-Hop music touring. If you are talking Hip-Hop touring, you are talking Cara Lewis.

In fact, numerous important agents in the industry, representing many top Hip-Hop and RAP artists now, began their careers in Cara Lewis' William Morris NY office. This includes Peter Schwartz, VP of Talent at the Agency Group, and Eric Wilson, VP of Talent at the Evolution Agency.

Lewis' early success came with artists such as A Tribe Called Quest, De La Soul, Ice Cube, Snoop Dogg, and the new, lighter-sound of groups like the Fugees. Her roster quickly grew to become the toughest and the tightest in the evolving genre.

At the time, there were fewer opportunities and fewer promoters that were receptive to RAP and Hip-Hop music. Promoters listened to the music, and played it in their clubs, but they didn't want to promote the live shows. However, in time, the credibility and viability of touring these artists was established. And, it was Lewis' relentless approach that made this happen.

Now, Lewis' roster is the who's who of RAP and Hip-Hop music. Artists that she currently represents include 50 Cent, Eminem, Ludacris, Sean "Diddy" Combs, Erykah Badu, Gnarls Barkley, Snoop Dogg, Ice Cube, Wyclef Jean, Nas, and Nelly, just to name a few.

Lewis is a yearly nominee and award winner at the annual Pollstar music industry awards, and her roster only continues to grow. She now also tours some of the biggest names in Reggae music, representing Ziggy and Damian Marley, as well as dancehall superstar Sean Paul. Other genres are also mixed in to Lewis' William Morris roster. Alicia Keys is just one example.

Another accomplishment for Lewis is the Smoking Grooves Tour, which was the first multi-artist urban music tour to be placed in 20,000 seat amphitheaters around the country. Prior to Smoking Grooves, the "sheds" were not particularly receptive to the burgeoning Hip-Hop music culture. Now, Hip-Hop and RAP artists are regular faces in the community of top-level touring.

Friday, July 18, 2008

MONTEREY PENINSULA AND LITTLE BIG MAN JOIN IMPRESSIVE ROSTERS TO BECOME, PERHAPS, THE PREMIER MUSIC AGENCY; OFF-SHOOT HIGH ROAD TOURING ON PACE

In recent years, New York based Paradigm Artists has made major moves to become, perhaps, the premier artist agency in the music industry.

In 2004, Paradigm purchased Monterey Peninsula Artists, the wildly-successful agency based in Monterey, California. In 2006, Paradigm purchased the New York based Little Big Man Booking, which was considered by many to be the top boutique music agency. This joins two impressive rosters that compliment each other perfectly. The combination also brings together many of the top talent agents in music touring.

At the time of the 2006 purchase, Marty Diamond and Larry Webman's Little Big Man Booking had been named the boutique agency of the year for nine out of ten consecutive years. Over the years, Monterey Peninsula Artists has consistently been named a top major agency by Pollstar, out of only a handful of major agencies.

Both companies, have numerous agents that have won the coveted Pollstar agent of the year award, and the combination of agents and expertise is impressive. The combined roster now includes the biggest of the biggest names in almost all genres of music.

Similar success has been found by Frank Riley and his High Road Touring agency. Frank Riley was one of Monterey Peninsula's top agents when he left the company in 2001 to create the Sausalito, California, based High Road Touring.

Since its 2001 inception, HRT has repeatedly been nominated as the premier boutique agency of the year at the Pollstar Awards, and it won the award in 2008 at the 19th Annual Pollstar industry awards.

HRT's impressive roster includes over 100 well-known acts, the likes of which include Wilco, Feist, Lucinda Williams, Son Volt, and Ween, to name a few. Riley's HRT includes agents who developed their expertise in San Francisco. HRT agent Lisa O'Hara was the talent buyer for the world-famous Great American Music Hall before joining HRT, and Matt Hickey came over from the successful San Francisco based agency Rosebud.

High Road Touring's roster is as eclectic as it is impressive. It is also a roster that is very tour-oriented, which, of course, is good for the bottom line of a talent agency. HRT is on the high road. [More Soon]

DISTRICT COURT FOR SOUTHERN DISTRICT OF NEW YORK SETS ASCAP ROYALTY RATE FOR MUSIC PLAYED ON THREE MAJOR INTERNET-PROVIDER SITES - APRIL 2008

On April 30, 2008, the US District Court for the Southern District of New York set the royalty rate that three major internet providers must pay ASCAP for the use of ASCAP composers' compositions.

The US District Court decided the royalty rate issue, in this instance, because the involved parties could not agree on a royalty rate under prior royalty rate guidelines, which were first established in 1941. The royalty rate for the use of music compositions is normally set by a rate board, unless the parties cannot agree on a fair, and consistent, royalty rate for the use of artist compositions.

AOL, Yahoo, Real Networks, and the royalty rate board could not agree on a fair rate in earlier negotiations over the previous three years. In turn, the court stepped-in and set the royalty rate that the three major internet providers must pay ASCAP, for the use of its artists' compositions, at 2.5%.

The 2.5% royalty rate is in-line with other rates paid by other users, in other mediums. Perhaps more importantly, the rate-setting district court decision establishes guidelines for the way internet providers will be treated by the royalty board in the near future. [MORE SHORTLY]

Tuesday, July 15, 2008

SUPREME COURT REFUSES TO HEAR FANTASY BASEBALL DISPUTE BETWEEN MAJOR LEAGUE BASEBALL AND A MISSOURI FANTASY BASEBALL COMPANY - JUNE 2008

On June 2, 2008, the Supreme Court denied writ of certiorari to Major League Baseball to hear its licensing dispute with the St. Louis-based fantasy baseball company, CBC Distribution.

Originally, the 2005 lawsuit was brought by CBC against MLB to protect its right to use MLB players' names and statistics in its fantasy baseball league, which MLB had moved to prevent.

In response to earlier difficulties securing revenues from the rapidly growing fantasy baseball market, MLB created its own fantasy baseball league, and then began informing outside companies, each could license the use of the new MLB fantasy league, but could not, effectively, run independent fantasy baseball leagues.

Without comment, the Supreme Court turned down the MLB appeal of the Eighth Circuit ruling, which affirmed an earlier district court ruling that CBC Distribution is not required to pay licensing fees to use MLB players' names and statistics in its fantasy baseball league (Eighth Circuit Opinion, Supreme Court Order).

The Federal Appeals Court in St. Louis held that, First Amendment guarantees outweigh the "right of publicity" that team owners and the players union had offered to support the argument that fantasy baseball leagues must pay licensing fees to use player names, statistics, and other public information.

In its ruling, the Eighth Circuit said, “the information used in CBC’s fantasy baseball games is all readily available in the public domain, and it would be strange law that a person would not have a First Amendment right to use information that is available to everyone.”

In its argument to the Supreme Court, MLB argued that its "right of publicity" outweighed CBC's First Amendment right to use information that is publicly available. The Supreme Court, however, agreed with the appellate court ruling, which affirmed that First Amendment rights are superior, under the circumstances.

This, effectively, ends MLB's attempt to gain control of the fantasy baseball market through licensing rights, which is an argument that has consistently been rejected by the courts.

It is an important ruling no doubt, as fantasy baseball has grown in to a $1.5 billion per year industry since its introduction in the mid-1980's. Now MLB will need to pursue other methods to gain its share of the fantasy baseball market, not its claim of licensing rights by way of "right of publicity."

Here is a Wall Street Journal article (Wall Street Journal), and a New York Times article (New York Times) on the Supreme Court ruling.

NEW YORK SUPREME COURT RULES DELL ELECTRONICS ENGAGED IN FRAUDULENT AND DECEPTIVE PRACTICES REGARDING CONSUMERS - MAY 2008

On May 27, 2008, New York State Supreme Court Justice Joseph C. Teresi ruled that Dell Electronics engaged in fraud, false advertising, and deceptive business practices pertaining to customer guarantees.

The decision is a victory for New York Attorney General Andrew Cuomo, who brought the case against Dell in 2007, charging that the company failed to live up to its responsibilities to its customers.

Dell has said the company disagrees with the ruling and feels that it was based on the complaints of only a small number of customers, and is not indicative of its over-all practices. Dell will, likely, appeal the ruling.

The court's 26-page opinion specifically addresses Dell's promise of interest-free and no-payment purchase agreements, its rebate payment practices, and its on-site tech service, which Dell apparently failed to adequately provide.

New York District Attorney Cuomo stated, “We have won an important victory that will force Dell to live up to its responsibilities," continuing that, “For too long at Dell the promise of customer service was a bait and switch that left thousands of people paying for essentially no service at all."

Apparently, Dell's failure to meet its promises to customers was wide-spread, not unique.

Further proceedings pend as to penalties for Dell's deceptive practices, and various other aspects of the ruling are yet to be settled [more soon].

Monday, July 14, 2008

DISTRICT COURT JUDGE FOR MANHATTAN RULES eBAY IS NOT LIABLE FOR COUNTERFEIT ITEMS SOLD ON ITS AUCTION WEBSITE; POLICING IS DUTY OF INFRINGED COMPANY

On July 14, 2008, U.S. District Court Judge Richard Sullivan in New York ruled that eBay is not liable for counterfeit items sold on its online auction website. In fact, District Court Judge Sullivan held, a company, like Tiffany in this case, has the responsibility to do its own policing for counterfeiting and other trademark infringement issues relating to its products sold online.

eBay calls the ruling a "major victory for consumers." However, the ruling also comes on the heels of a French court ruling last month, which ordered eBay to pay Louis Vuitton $61 million for similar "knock-off" items sold on eBay that infringed on LV's trademark rights. eBay has appealed the French court ruling.

Regardless, the July 14, District Court Judge ruling is an important victory for eBay and its online competitors. As District Court Judge Richard Sullivan's 66-page opinion states, "Brand owners must be vigilant [in protecting trademark interests online]."

Separately, in a yet to be settled question of law, the district court judge also said that eBay could use the Tiffany name in its ads, both on its home-page and in sponsored links eBay buys on search engines such as Google and Yahoo. Important lawsuits still pend in the area of search engines and related internet advertising.

Here is one eBay press release on the favorable ruling for eBay (eBay-EBAY issues statement on Tiffany ruling) and a clip from the eBayInk Blog, on the company's victory (eBay Wins Tiffany Court Case).

Sunday, July 13, 2008

ANHEUSER-BUSCH AGREES TO $50 BILLION TAKEOVER BID BY BELGIAN BREWING GIANT INBEV; THE DEAL IS REPORTEDLY $70 PER SHARE

On July 13, 2008, the Wall Street Journal reported that Anheuser-Busch has agreed to to be acquired by Belgian Brewing Giant, InBev, for a sweetened offer of $49.91 billion.

The InBev offer is reportedly $70 per share, somewhat higher than its previous offer of $65 per share that was quickly rejected by Anheuser-Busch in June. At the time, InBev threatened suit.

Anheuser -Busch is the number one brewer in America, controlling 50% of the US market alone, and InBev's purchase of Anheuser-Busch will create, by far, the largest brewery conglomerate in the world.

This is big news in St. Louis, Missouri, the home of Anheuser-Busch. It is equally big news in the international beverage industry. Of course, neither company is exclusively a brewer.

Here is the Reuters' release (Business Feed Article | Business ).

FOR TWO DECADES, THE VIABILITY OF RAP MUSIC HAS BEEN QUESTIONED; TODAY IT IS THE MATERIALISM AND MISOGYNY THAT'S QUESTIONED, NOT VIABILITY

As Rolling Stone Magazine and the Associated Press recently reported, Senator Barack Obama has revealed his iPod music list. He has also provided some insight in to his current music list.

And, while the Democratic Presidential nominee has eclectic tastes (he is a big fan of musicians such as Bob Dylan, Bruce Springsteen, Miles Davis, Stevie Wonder, and J-Z, among others), Obama did express his admiration for, and concerns about, Rap music.

As Rolling Stone and the AP report, Senator Obama has reservations about the message of some Rap music. "I am troubled sometimes by the misogyny and materialism of a lot of rap lyrics," he said, "but I think the genius of the art form has shifted the culture and helped to desegregate music." (AP article Obama reveals iPod song list).

While Obama said hip-hop mogul Russell Simmons and rappers Jay-Z and Ludacris are "great talents and great businessmen..." he also said, "It would be nice if I could have my daughters listen to their music without me worrying that they were getting bad images of themselves."

Obama's concern is frequently echoed. It is a continuing discussion in the music industry, and is also an important discussion taking place in homes around the world. In short, the problematic message of Rap music is a widely expressed concern.

However, despite the often disconcerting message of its lyrics, and videos, Rap music's commercial success has not been impeded. Rap has found complete acceptance in the world of Pop music. Rap's consistent presence on the top of the music charts is undeniable. For example, at the moment, roughly one-third of the albums included on BillBoard Music's Top-Fifty albums are Rap albums.

It is also argued, perhaps correctly, that it is the materialism and misogyny that drives Rap music's commercial success. While unfortunate, this may be reality. How to address the problem is another issue, and First Amendment protections control.

You can link to Billboard Music and its charts by clicking the IPEB link to the left.

Saturday, July 12, 2008

MICROSOFT'S TAKEOVER BID FOR YAHOO FAILS, AND YAHOO'S PARTNERSHIP WITH GOOGLE IS SUSPENDED FOR 3.5 MONTHS; WHAT'S GOING ON WITH THE INTERNET GIANTS?

As the Washington Post first reported July 2, 2008, (reported) the Justice Department's antitrust division is investigating the proposed advertising partnership between Yahoo and Google.

In May, at the request of the Justice Department, the two companies suspended the agreed-upon partnership for three and a half months, while the Department investigates antitrust issues related to the deal.

Yahoo contends that the investigation is not unusual, washingtonpost.com reports. However, attorneys familiar with similar Department of Justice antitrust investigations say that the type of requests now being made by the Department are not routine.

"They don't do it without having identified significant issues," said M.J. Moltenbrey, a Freshfields, Bruckhaus, & Deringer lawyer, who was director of civil non-merger enforcement in the Justice Department's antitrust division in the 1990s. "It involves approval at higher levels within the antitrust division." washingtonpost.com reports.

The Justice Department, and Google, have not commented on the investigation. However, Google competitors and critics complain, Google will gain a monopoly on internet advertising, if the Yahoo deal is approved.

Only weeks prior, Yahoo rejected Microsoft's "unsolicited" $44.6 billion takeover bid, which was a $31 per share offer. Yahoo's stock price has been on a wild ride since the announcement of potential developments, earlier this year.

Yahoo's stock has traded as high as $40 per share when the Microsoft deal was announced in February, but, in recent weeks, it has remained under the $31 per share price offered by Microsoft. In fact, Yahoo's stock has traded as low as $24 per share since the Microsoft offer was rejected.

Before formally rejecting the Microsoft offer, Yahoo stated it would accept a $41 per share offer from Microsoft. Microsoft, however, did not counter. In response, Yahoo proceeded to close the advertising deal with Google, which is now under DOJ scrutiny.

Regardless, Microsoft is preparing a new offer for Yahoo, and it has approached other media companies about joining in the deal, the Wall Street Journal reports (Microsoft Seeks Partners for New Yahoo Run). Microsoft has held discussions with Time-Warner and NewsCorp, among others, the Journal reports.

[More on both the Yahoo/Google antitrust investigation, and Microsoft's renewed takeover bid, shortly].

Thursday, July 10, 2008

U.S. DISTRICT COURT FOR NORTHERN DISTRICT OF GEORGIA RULES WAL-MART HAS NO ESTABLISHED TRADEMARK RIGHTS IN THE UBIGUITOUS, YELLOW SMILEY FACE

There is little dispute that the yellow "smiley face" has been in commercial existence since the early 1970's, if not before. However, the trademark rights to the ubiquitous and timeless image have yet to be established, some 35 years later.

Regardless, Wal-Mart, the mega-store retailer, argues that it has gained exclusive trademark protection for the well-recognized, yellow smiley face from its continued commercial use of the image in its mega-stores.

However, on March 20, 2008, the US District Court for the Southern District of Georgia ruled, in part, that Wal-Mart has established no current rights in the trademark.

The District Court ruling stems from a trademark infringement lawsuit Wal-Mart brought against a Georgia man, who was making and selling T-shirts, beer steins, and other items sporting various slogans parodying Wal-Mart.

What was not in dispute is the fact that Wal-Mart has trademark protection for "WALMART" "WAL-MART" AND "WAL*MART", and its registered word mark "ALWAYS LOW PRICES, ALWAYS." In dispute, however, was Wal-Mart's contention that it had acquired common law trademark rights in the smiley face under the principle of "secondary meaning." Here, the court strongly disagreed.

A mark, like the smiley face, that is not inherently distinctive, may acquire distinctiveness or secondary meaning by "becoming associated in the minds of the public with the products or services offered by the proprietor of the mark..." the court stated, quoting a 2007 Eleventh Circuit opinion.

However, Wal-Mart failed to establish this level of recognition, acceptance, or distinctiveness, the court concluded.

The District Court found that Wal-Mart presented little evidence to support its secondary meaning claim to the smiley face. In fact, the only evidence presented by Wal-Mart supporting its claim was a "conclusory" affidavit from a senior marketing manager who had been with the company since November 2006.

In turn, the District Court granted defendant's summary judgment motion on all Wal-Mart claims pertaining to the yellow smiley face.

Wal-Mart, however, continues to fight for trademark rights in the smiley face. The United States Patent and Trademark Office has still not ruled on a dispute over the rights to the smiley face between Wal-Mart and a French family that claims to have registered the design with French trademark authorities. The dispute began in 2005.

The 65 year-old French citizen, Franklin Loufrani, registered the smiley face in France in 1971. As Loufrani told the New York Times in 2006, "A prehistoric man probably invented the smiley face in some cave, but I certainly was the first to register it as a trademark." And, Loufrani says, "When it comes to commercial use, registration, is what counts."

The New York Times also reports that the most widely accepted claim for inventing the smiley face goes to Harvey Ball, for the smiley yellow button he designed for the State Mutual Life Assurance Company of America in 1963.

According to Ball's 2001 obituary in The Worcester Telegram & Gazette, the Times reports, Ball was paid $45 for designing the button intended to cheer up employees during a tough time for the company. Ball, however, never registered the mark or used the mark commercially.

Here is the New York Times article referenced above (Smiley Face Is Serious to Company) and another article from the Trademark Law Blog on Lexis/Nexis (Trademark Law Center: Trademark Infringement: No Smiley Face).

Wednesday, July 9, 2008

IN 2006, ENTERTAINMENT MOGUL DAVID GEFFEN SOLD THE TWO MOST EXPENSIVE PAINTINGS EVER SOLD IN THE FINE ART MARKET; NO SALE SINCE HAS EVEN COME CLOSE

In 2006, from his private collection, music and movie mogul David Geffen sold the two most expensive paintings ever sold in the fine art market.

Geffen must have known something about the art market (and perhaps the economy), because no sale since 2006 has even come close. In fact, in the last two years, the two closest sale prices for a painting are each a substantial $45 million short of the two Geffen record prices.

The Geffen sales were two of four hugely-important, $100 million plus, sales that took place in 2006.

The most expensive painting of the group, sold by Geffen in a private sale, is Jackson Pollock's "Number 5, 1948" (1948), which sold for $140 million. The next most expensive ever sold, also sold by Geffen in a private sale in 2006, is Willem De Kooning's "Woman III" (1952-53), which sold for $137.5 million.

The third most expensive painting ever sold was also sold in 2006. Again, it was sold from a private collection, in a private sale. The painting is Gustav Klimt's most recognized work "Adele Bloch-bauer I" (1907), which sold for $135 million.

In 2006, the fifth most expensive painting was also sold. The painting, sold at auction by Sotheby's, is Pablo Picasso's "Dora Maar au chat" (1941), which sold for $92.5 million. The fourth most expensive painting ever sold is also a Picasso, which was sold at auction by Sotheby's in 2004.

In 2007, at least three important multi-million dollar sales took place, but each fell considerably short of the 2006 Geffen sales.

Mark Rothko's "White center...yellow"(1959) sold for $72.8 million; Andy Warhol's "Green Car Crash" (1963) sold for $71.1 million; Francis Bacon's "Study for Innocent X" (1962) sold for $52.7 million.

In 2008, little has happened to challenge 2006 record fine art sale prices.

In short, 2006 was the most important year in modern fine art sales history, and David Geffen alone grossed $277.5 million on the sale of just two paintings.

Also of note, Vincent Van Gogh dropped to seventh on the most expensive painting list, for the sale of "Portrait of Dr. Gachet", which sold in 1990 for a then-record price of $82.5 million.

Here is a nice web-page with the entire list, including reproductions of the works, from theartwolf.com (
Most Expensive Paintings) and another article from economist.com on the current art market (Art.view | The art market in 2008).

Monday, July 7, 2008

SUPREME COURT RULES IN FAVOR OF QUANTA IN IMPORTANT PATENT INFRINGEMENT CASE ADDRESSING THE DOCTRINE OF PATENT EXHAUSTION

On June 9, 2008, the Supreme Court, in a unanimous decision, ruled in favor of Quanta and against LG Electronics, holding that the doctrine of patent exhaustion applies to the authorized sale of components that “substantially embody” a process patent.

Patent exhaustion means that any single sale of the patented component to another manufacturer effectively ends the life of the component's patent protection.

The Supreme Court opinion (QUANTA COMPUTER, INC. v. LG ELECTRONICS, INC.), delivered by Justice Thomas, affirms the longstanding rule that “the right to vend is exhausted by a single, unconditional sale, the article sold being thereby carried outside the monopoly of the patent law and rendered free of every restriction which the vendor may attempt to put upon it.” Motion Picture Patents, 243 U. S. 502 (1917).

The ruling states that the "patent exhaustion doctrine provides that a patented item’s initial authorized sale terminates all patent rights to that item." See, e.g., Bloomer v. McQuewan, 14 How. 539. In the Court’s most recent discussion of the doctrine, United States v. Univis Lens Co., 316 U. S. 241.

In short, the patent exhaustion doctrine, also referred to as the "first sale" doctrine in patent and copyright case law, is alive and well.

The ruling, reversing the Federal Circuit, also states that, among other things, "...the doctrine of patent exhaustion applies to method patents, and because the License Agreement [between Intel (for LG) and Quanta] authorizes the sale of components that substantially embody the patents in suit, the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products."

The decision, Patently-O suggests in a June 9 article, supports two patent dictates: (1) method claims can be subject to exhaustion and (2) sales of products that that do not fully practice the invention can still trigger exhaustion when the products include essential features of the patent and the “reasonable and intended use” of the product is important to the patent.

Here is the Patently-O article from June 9 (Supreme Court Decides Quanta v. LG ...) and another article from WallStreetJournal.com, with an interview with WSJ Supreme Court reporter Jess Bravin (Chipping Away at the Quanta v. LG Electronics ...).

Saturday, July 5, 2008

NASCAR RACING HIT WITH $225 MILLION DISCRIMINATION LAWSUIT BY 32 YEAR-OLD, AFRICAN-AMERICAN, FEMALE NASCAR TECH INSPECTOR

On June 10, 2008, Mauricia Grant, a NASCAR race official hired in January 2005 and terminated last October, has filed a $225 million harassment and discrimination lawsuit against NASCAR.

The scathing complaint filed in the US District Court for the Southern District of New York, alleges, among other things, that Grant was called a series of degrading names, such as "Nappy Headed Mo" "Queen Sheba" and "Simpleton", and was subjected to racist stereotypes, such as being told she worked "on Colored People Time" if she arrived late.

For more than 20 pages, Grant's $225 million complaint details allegedly obscene e-mails, text messages, and racist and sexist comments directed at her. The complaint also states that Grant was frightened by one official who routinely made references to the Ku Klux Klan.

In addition, Grant says she was subjected to sexual advances from male co-workers, two of whom allegedly exposed themselves to her. The two NASCAR officials were placed on indefinite administrative paid leave Friday, June 13, just a few days after Grant filed her lawsuit against NASCAR.

NASCAR says it has not reviewed the complaint, but insists that it is an equal opportunity employer with a positive work environment.

However, this may be the wake-up call that many feel the male-dominated sport needs. As Grant's lawyer has stated, the lawsuit is, at least in part, about bringing the sport in to the 21st century as far as harassment and discrimination go.

"NASCAR perpetuated, condoned and actively participated in perverted and disgusting sexual conduct designed to demean and diminish (Grant) and the handful of other women employed by NASCAR as officials," the lawsuit said.

Here is a sportsillustrated.cnn.com article which details further Grant's complaint against NASCAR (Plaintiff speaks out against NASCAR's 'ignorant' culture) and an article from USAToday.com (NASCAR admits 'violations' in suspending officials) which provides some insight in to what NASCAR officials are saying about Grant's claim.

ANHEUSER-BUSCH, THE PRIDE AND PILLAR OF ST. LOUIS, MISSOURI, CONTINUES TO FIGHT $46.3 BILLION TAKEOVER BY BELGIAN BREWER INBEV

Anheuser-Busch, the pride of St. Louis, Missouri, and a 50% holder of the domestic beer market, with an equally impressive share of international beer sales, is fighting to maintain control of the century-old, family-legacy business. However, as a public company, and as news insiders have suggested, even Anheuser-Busch is vulnerable to a takeover. [See ipeb Sunday July 13 article for new details]

On June 11, Belgian Brewer InBev, a huge international beverage-provider in its own right, made an unsolicited $65 per share offer for Anheuser-Busch, which the Anheuser-Busch board of directors are prepared to reject, cnnmoney.com reports.

In response, on June 26, InBev announced that it had filed a lawsuit in Delaware Chancery Court, where Anheuser-Busch is incorporated, to have Anheuser-Busch shareholders remove board of director members who oppose the sale.

It goes without saying, that the tight-knit, St. Louis community is vehemently opposed to the takeover. Not only does Anheuser-Busch employ 6,000 workers in the St. Louis area, but it is instrumental in philanthropy, education, cultural development, and community out-reach in St. Louis.

For a look at Anheuser-Busch go to (Anheuser-Busch Companies).

Here is the cnnmoney.com article referenced above (InBev makes hostile move in Anheuser-Busch takeover) and another article from NPR (Anheuser-Busch Takeover Talk Shakes St. Louis).

AS STARBUCKS CUSTOMERS KNOW, STARBUCKS HAS A RECORD LABEL; WHAT'S UP WITH STARBUCKS' HEARMUSIC LABEL, AND ITS OTHER ENTERTAINMENT IDEAS?

Starbucks Hear Music label is responsible for all the nicely packaged music that coffee-drinkers find on stands and shelves in Starbucks coffee outlets. As the hearmusic.com site says, Starbucks Hear Music is the "Sound of Starbucks."

The alternative record label, founded in 1990 and acquired by Starbucks in 1999 for $8 million, has found Grande success within the green and white of Starbucks. In February, the Joni Mitchell single "One Week Last Summer" from her Hear Music debut Shine, earned Mitchell the six Grammy of her career.

In addition, world music sensation Angelique Kidjo won her first Grammy in February at the 50th Anniversary Awards show, for her Razor & Tie/Starbucks Entertainment album DJIN DJIN. Also in February, among other new releases, Starbucks Entertainment and Concord Records co-released multi-platinum recording artist Kenny G's latest album, Rhythm and Romance.

The label, and other music business partnerships that Starbucks aggressively pursues, are all part of Starbucks' big-picture plan. "This is not a gimmick, and this is not an approach to take to sell more coffee," says Kenneth T. Lombard, president of Starbucks Entertainment, the unit overseeing the music efforts. "This is a firm commitment to take advantage of our unique platform to discover and acquire music."

Lombard is referring not only to the Hear Music label, but also to Starbucks' XM Satellite radio show, its 2007 partnership with Apple and iTunes, and its push in to music retailing where a Starbucks outlet is a record store first, and a coffeehouse second. Seattle, Austin, and Berkeley CA., already boast these Starbucks music retail outlets.

The exclusive partnership between Apple and Starbucks Entertainment, allows Starbucks customers to wirelessly browse, preview, buy and download music from the iTunes Wi-Fi Music Store at Starbucks. Both Starbucks and Apple feel this is a great opportunity, and are rapidly placing music kiosks in diverse Starbucks locations.

"We think this is very cool...and it is a great way for customers to discover new music." Apple CEO Steve Jobs explains. "Imagine walking in to a participating Starbucks, hearing a great song, and being able to instantly download it on to your iPod or iPhone."

The 2008 roll out of iTunes Wi-Fi Music Stores, with a debut last October in Seattle and New York, will include 350 Starbucks locations in the San Francisco Bay Area, 500 in Los Angeles, 300 in Chicago, and many other markets. The Apple/Starbucks partnership, Starbucks Coffee Chairman Howard Schultz says, is a uniques opportunity to "offer customers a world-class digital music experience."

Starbucks is doing much the same in book publishing and movies. To learn more go to (
Hear Music | The Sound of Starbucks).

APPLE COMPUTER WORKS HARD TO EXPAND ITS TRADEMARK PROTECTIONS AND BRANDING FOR THE ICONIC iPOD

On January 8, 2008, the U.S. Patent and Trademark Office granted Apple Computer a trademark for the three-dimensional shape of its iPod media player. Traditionally, trademark protections have applied primarily to names, images, logos, symbols and other two-dimensional aspects of trademarks.

More recently, however, the USPTO has granted non-traditional trademark protection for aspects of products such as color, scent, and shape. An excellent example of this, is the trademark protection provided Yamaha Motor Corp., for the arching water spray that is produced by its jet ski, as David Orozco and James Conley reported May 12, in a Wall Street Journal article on the iPod trademark.

Non-traditional trademark protection is difficult to obtain. Approval for protection, turns on convincing the USPTO that for the consumer, the three-dimensional design component is a key aspect to consumers' recognition of the product.

Accordingly, Apple needed to show that media player consumers, recognize the iPod specifically for its shape. This protection arises from the "likelihood of confusion" analysis, that trademark law embraces.

Trademark protection in this area is particularly important because trademarks can remain in effect in perpetuity, while utility and function patents expire, and may become fair-game for competitors.

In addition, trademark law allows a plaintiff like Apple to not only sue the manufacturer of an infringing product, but also the distributors of the product. This provides an additional deterrence, which may otherwise be ignored by competitors, particularly in the hugely-competitive market of mobile media players.

Here is the David Orozco/James Conley Wall Street Journal article referenced above (Shape of Things to Come) and a short article from engadget with links (Apple trademarks iPod's design).

Friday, July 4, 2008

41 YEAR-OLD SWIMMER DARA TORRES HEADS TO BEIJING OLYMPICS IN MULTIPLE EVENTS; WHEN SHE COMES HOME, MANY BUSINESS OPPORTUNITIES SHOULD AWAIT

41 year-old Dara Torres won the first of her nine Olympic swimming medals in 1984 in Los Angeles. She is now heading back to the Olympics representing the United States in Beijing, China in multiple events. The business opportunities that await her after Beijing are enormous.

Not only are her accomplishments important Olympic accomplishments, but Torres has the other components that media and advertising personnel want. While Torres is twice the age of most of her closet swimming competitors, she is also a symbol of health, beauty, and longevity.

Torres' success outside the pool, however, is not new. For one, she has a lucrative and ongoing sponsorship deal with Team Speedo, the mega-successful swimsuit manufacturer, which includes media and retail appearances. Among other deals, Torres also has a deal with Toyota to produce Dara Torres swim clinics.

Torres has also been somewhat of a media personality. As swimmingworldmagazine.com reports, Torres has provided sports commentary on NBC, ESPN, Fox Sports Net, and even as a host for USA Network’s “PGA Tour Sunday.”

She has also been a TV personality as co-host and correspondent on such top-rated programs as “Live with Regis and Kelly” and “Good Morning America.” Other television work includes “NHL Cool Shots” (ESPN), “Fox Sports Sunday”, “Inside Edition”, and the “Tae-Bo” workout videotapes, swimmingworldmagazine.com reports.

Look to see a lot more of Dara Torres this year, and beyond. Also look for her to expand her sponsorship and advertising deals outside the area of sports. Particularly likely are product deals pertaining to women's fashion, health, and beauty. Any medals in Beijing for Torres, should turn to gold.

Here is an article on Torres' recent accomplishments from the Miami Herald (Same old story for Torres) an article from NYTimes.com (Dara Torres - Profile - Olympic Swimming) and the above referenced article from swimmingworldmagazine.com (Lane 9 News).




Thursday, July 3, 2008

US DISTRICT COURT FOR SOUTHERN DISTRICT OF NEW YORK RULES GOOGLE MUST PROVIDE VIACOM WITH YOUTUBE USER ID INFO INCLUDING IP ADDRESSES

As Electronic Frontier Foundation reported July 2, 2008 (Court Ruling Will Expose Viewing Habits of YouTube Users), the United States District Court for the Southern District of New York has ruled in favor of Viacom, and against Google/YouTube, in a hugely important internet privacy case.

The district court's ruling, among other things, instructs Google to provide Viacom with YouTube user log-in information, including the user IP address (internet protocol address - your computer address), which has previously been held private.

The ruling, EFF and others suggest, is a major rebuke of the Video Privacy Protection Act (VPPA) (18 U.S.C. § 2710). The court, however, states that it dismissed Google's VPPA argument, because Google cited "no authority" to bar such disclosure of log-in information in civil proceedings.

Regardless, the NY district court ruling applies broadly to YouTube users. Quoting the district court opinion, EFF reports that the ruling applies to:

"all data from the Logging database concerning each time a YouTube video has been viewed on the YouTube website or through embedding on a third-party website."

In other words, Google must provide all log-in ID information, for all YouTube users, which includes the IP address of the user. This also includes the content, time, and duration of all video views.


Here are court documents pertaining to the case, courtesy of justia.com (Viacom v. Google litigation), as well as the July 1 order from the District Court/Southern District of New York (ordered). An appeal is certain.

Wednesday, July 2, 2008

360 RECORD DEALS; THE ALL-REVENUES RECORD DEAL HAS THE MUSIC INDUSTRY BUZZING, BUT WILL THESE DEALS BENEFIT THE ARTIST OR THE COMPANIES THAT SIGN THEM

For nearly twenty-five years Madonna had been a Warner Bros. Records recording artist. However, in October of 2007, Madonna informed the label that she was signing a new ten-year, $120 million deal with LiveNation, an international concert and theater production company.

The deal, while not the first, was certainly the biggest 360 record deal signed. LiveNation has since proceeded to sign a $150 million 360 deal with Jay-Z.

Both deals are at the instruction of new LiveNation executive Michael Cohl, now perhaps the key player in LiveNation's international development plan. Before joining LiveNation, Cohl dominated the international concert industry with impressive and creative financing of international mega-star tours, such as the Rolling Stones and U2, to name a few.

The 360 record deal is a major break from the traditional artist-label relationship. The new structuring of a 360 record deal allows the label (or companies like LiveNation) to participate in all revenue streams generated by an artist, not just record sales.

In return for more comprehensive support and budgeting, the label takes a handsome percentage of revenues that have traditionally been exclusive to the artist, such as the hugely important revenue from touring, as well as revenue from merchandising and the various forms of digital marketing.

How a 360 deal will work out for Madonna, or LiveNation, or others who sign 360 deals, is yet to be seen. As USC Thorton School of Music Professor Mark Goldstein says, in an informative interview on artistshousemusic.org, it may take "three to five years" to determine the benefits or burdens of the newly structured 360 deals.

None the less, Goldstein says, many more 360 deals will be signed in the coming months, because the big labels and international concert producers want to be the first to successfully navigate these waters.

It may follow that the big-named acts, with established touring history, and marketing history, will be the focus of 360 record deal development. It seems likely that the touring component of an artist's career, and related longevity, will be key to these 360 deals. If touring is an important revenue for the artist, than a 360 deal may be what the record company or its concert-producing competitor wants.

Here is Mark Goldstein's interview on ArtistsHouse (Are "360 Deals" Worth It?), and a good article from the MELONblog on the particulars of 360 deals (360 Deals Pt. 1).

Tuesday, July 1, 2008

ELEVENTH CIRCUIT RULES IN FAVOR OF NATIONAL GEOGRAPHIC IN IMPORTANT COPYRIGHT ROYALTY CASE AFTER A DECADE OF LITIGATION

For over a decade, the National Geographic Society has fought photographers and writers over whether it must pay additional royalties associated with the sale of its Complete National Geographic digital archive series, which it markets through its usual channels.

On Monday, June 30th, the Eleventh Circuit, in a sharply divided 7-4 decision, ruled in favor of National Geographic and against a Florida photographer whose work appeared in National Geographic magazine.

As law.com reports, 17 U.S.C. § 201(c) is the copyright statute at issue. The ruling turns on what constitutes an acceptable revision and what constitutes a new work in light of a 2001 Supreme Court landmark copyright ruling, New York Times v. Tasini.

The Court in Tasini held that publishers, like Lexis/Nexis, must get copyright permission to reprint freelance writer's articles on its database. The Eleventh Circuit ruling, distinguishes between reproduction of freelance works for a company's database and works that are reproduced in CD-ROM or DVD format.

Back-to-back rulings by the Second Circuit and now the Eleventh Circuit, favoring the National Geographic Society, will allow magazine and newspaper publishers to market their archived publications in CD-Rom and DVD format without being required to pay royalties to writers and photographers whose work appeared originally in magazine or newspaper format.

Here is the law.com article referenced above (Law.com - Legal News, Legal Technology) and the majority opinion follows ( Jerry Greenberg v. National Geographic Society).